Correlation Between NexPoint Diversified and Safehold
Can any of the company-specific risk be diversified away by investing in both NexPoint Diversified and Safehold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NexPoint Diversified and Safehold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexPoint Diversified Real and Safehold, you can compare the effects of market volatilities on NexPoint Diversified and Safehold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NexPoint Diversified with a short position of Safehold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexPoint Diversified and Safehold.
Diversification Opportunities for NexPoint Diversified and Safehold
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NexPoint and Safehold is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Diversified Real and Safehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safehold and NexPoint Diversified is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NexPoint Diversified Real are associated (or correlated) with Safehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safehold has no effect on the direction of NexPoint Diversified i.e., NexPoint Diversified and Safehold go up and down completely randomly.
Pair Corralation between NexPoint Diversified and Safehold
Assuming the 90 days trading horizon NexPoint Diversified Real is expected to generate 0.4 times more return on investment than Safehold. However, NexPoint Diversified Real is 2.48 times less risky than Safehold. It trades about 0.2 of its potential returns per unit of risk. Safehold is currently generating about -0.1 per unit of risk. If you would invest 1,566 in NexPoint Diversified Real on August 30, 2024 and sell it today you would earn a total of 61.00 from holding NexPoint Diversified Real or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexPoint Diversified Real vs. Safehold
Performance |
| Timeline |
| NexPoint Diversified Real |
| Safehold |
NexPoint Diversified and Safehold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexPoint Diversified and Safehold
The main advantage of trading using opposite NexPoint Diversified and Safehold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexPoint Diversified position performs unexpectedly, Safehold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Safehold will offset losses from the drop in Safehold's long position.| NexPoint Diversified vs. NexPoint Strategic Opportunities | NexPoint Diversified vs. Prospect Capital | NexPoint Diversified vs. Ready Capital | NexPoint Diversified vs. SiriusPoint |
| Safehold vs. Essential Properties Realty | Safehold vs. Broadstone Net Lease | Safehold vs. Armada Hflr Pr | Safehold vs. CTO Realty Growth |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stocks Directory Find actively traded stocks across global markets |